I, for one, welcome our new Canadian Banking Overlords

[Zkribbler]

Canada rated world's soundest bank system
By Rob Taylor


CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.

But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.

The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.

The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.

The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).

Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).

UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).

The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.

The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF's banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.

Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20.

At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).

RANKINGS

1. Canada
2. Sweden
3. Luxembourg
4. Australia
5. Denmark
6. Netherlands
7. Belgium
8. New Zealand
9. Ireland
10. Malta
11. Hong Kong
12. Finland
13. Singapore
14. Norway
15. South Africa
16. Switzerland
17. Namibia
18. Chile
19. France
20. Spain

--------------------------------------------

124. Kazakhstan
125. Cambodia
126. Burundi
127. Chad
128. Ethiopia
129. Argentina
130. East Timor
131. Kyrgyz Republic
132. Lesotho
133. Libya
134. Algeria

SOURCE: World Economic Forum Global Competitiveness Report 2008-2009.

(For the full World Economic Forum report click on: http://www.weforum.org/GCR0809_Browser )

[Zoid]

Sweden

[Guynemer]

Yet another reason why I love our neighbors to the North.

[Asher]

What's interesting is in the election campaigns all four of the biggest left-wing opposition parties are running on the platform that Canada's Prime Minister -- who has a Masters degree in Economics -- has no idea what the **** he's doing. They keep fearmongering that the economy is going to collapse and the banks are going to go under, when they're all fine -- but the fearmongering itself is very dangerous. It's grossly irresponsible.

The worst part? Joe ****ing Public is believing the bull****. Because of the US financial crisis, the Liberals and NDP (Socialists) are saying we can't depend on the "cold-hearted economist" PM and we need more taxes, and more spending.

[Traianvs]

Originally posted by Asher
What's interesting is in the election campaigns all four of the biggest left-wing opposition parties are running on the platform that Canada's Prime Minister -- who has a Masters degree in Economics -- has no idea what the **** he's doing. They keep fearmongering that the economy is going to collapse and the banks are going to go under, when they're all fine -- but the fearmongering itself is very dangerous. It's grossly irresponsible.

The worst part? Joe ****ing Public is believing the bull****. Because of the US financial crisis, the Liberals and NDP (Socialists) are saying we can't depend on the "cold-hearted economist" PM and we need more taxes, and more spending.

Can you be so positive? Even in countries that have a relatively sound banking system banks are collapsing. Okay mostly due to the fact that US banks have a stake in many foreign banks and vice versa. Belgium has lost its crown jewel Fortis to the wretched French and Dutch, and Dexia is on the verge of similar meltdown.

Everyone's hurtin', and so much as every financial pundit left or right is advocating more regulation on banking practices. Bankers and their shareholders have gained massive profits in the past two decades thanks to the ideological shift in top banker's minds. In that respect top bankers are very much to blame. They gambled with money that they didn't have, that they had spent via a maze of complicated mechanisms that no layman could fathom. But when the **** hit the fan they expect gov'ment to help them out, and at the same time paying those corporate ****s a hefty multi-million severance pay.

So I'm wondering: in what way does Canada differ from that? You're not going to fool anyone by saying Canadian banks are respectable banks that merely hold money on deposit.

[Asher]

Read the OP and its links to answer your questions, I ain't doing your work for you.

I'll even help you out: http://www.weforum.org/pdf/GCR08/Canada.pdf

[Traianvs]

Then why are top countries' politicians frantically trying to curtail the bank collapse like in the Netherlands, Belgium, Luxemburg or Ireland.

I don't expect you to read European newspapers, but rest assured, the crisis is big here too.


From what I understand that report talks about Canada's competitiveness. It's doing good yeah, but that doesn't mean your banks are invulnerable. You do understand this crisis is worldwide yes. Especially in the banking trade globalization is taking its toll

[Asher]

Originally posted by Traianvs
Then why are top countries' politicians frantically trying to curtail the bank collapse like in the Netherlands, Belgium, Luxemburg or Ireland.

I don't expect you to read European newspapers, but rest assured, the crisis is big here too.

Probably because those companies followed the American example in the late 90s, while Canada's government stepped in to prevent mega bank mergers which would enable more risky trading like what's got everyone into trouble. It pissed off the banks at the time, but I'd imagine they're happy now.

Not to mention the difference in the economy -- Canada is a net exporting resource-driven economy which deals in a lot of resources that demand is steady or rising (eg, energy). There is no "credit crunch" in Canada, but we are being affected by it -- it's just not devastating to the market.

Canada's banks are well-capitalized, moreso than the banks failing in other countries.

[Kidlicious]

Totalitarian governments also have sound banking systems and resistance to global economic meltdowns.

[Asher]

Originally posted by Kidicious
Totalitarian governments also have sound banking systems and resistance to global economic meltdowns.

Not according to this report.

[Kidlicious]

Originally posted by Asher

Not according to this report.

According to the report the US is ranked #1 in Global Competitiveness. We don't need a stable banking system.

[Traianvs]

Originally posted by Asher

Probably because those companies followed the American example in the late 90s, while Canada's government stepped in to prevent mega bank mergers which would enable more risky trading like what's got everyone into trouble. It pissed off the banks at the time, but I'd imagine they're happy now.

Not to mention the difference in the economy -- Canada is a net exporting resource-driven economy which deals in a lot of resources that demand is steady or rising (eg, energy). There is no "credit crunch" in Canada, but we are being affected by it -- it's just not devastating to the market.

Fair enough. If that's true then yes Canada made the right decision. Over here bankers followed the American example.

A quick glance at Canada's election history tells me the liberals were pretty much in power during the ninetees. I don't really know their exact ideological build. From a 'liberal' (economic) point of view it's strange though. Looks like you had some decent prescient banking managers over there

[Asher]

The Liberals are centre-left in Canada.
Conservatives are centre-right (comparable to Democrats in the US).
NDP are far left.
The Greens are just clueless.

[Kidlicious]

Ok, seriously, even if your banking system is sound, in a global market you will have the same credit crunch as the US, no?

[notyoueither]

Yes, we will.

At a minimum we will have a more severe case of what ails the US economy as very many jobs are directly linked to exports to the US.

We also have inflated real estate prices in some markets. We may be shielded from some of the severe effects on banking though, as irresponsible lending never got too much of a hold here and was fairly quickly put down before the crisis began to break in the US.

While some of our banks are exposed to the toxic debt in the US (they were players in the CDS market) they are well capitalised and have a lot of cash flow.

Consumer credit does stand to take a beating, and some of the bubble RE markets will pop as Canadian bankers decide conservative is the order of the day.